BRATTLEBORO — Federal prosecutors reached a plea agreement with a Woodstock businessman accused of mishandling a New York business partner’s money to start up a new beverage business.

Paul Hendler of Woodstock is expected to plead guilty on May 7 to one count of wire fraud and one count of money laundering, according to court documents released Monday. He faces up to 20 years in prison and up to $250,000 in fines for the wire fraud charge and up to 10 years and $250,000 for the money laundering charge.

According to a grand jury indictment, Paul Brown of New York City invested in Hendler’s start-up beverage company Java Pop Inc., a distributor of carbonated coffee drinks, which is no longer in business. Brown wrote out a $140,000 check to Hendler in September 2006 and Hendler deposited it into his personal Key Bank account for “his own use and enjoyment,” the indictment said.

The indictment also said $43,500 of Brown’s money went toward a down payment on Hendler’s Woodstock property in November 2006.

According to the plea agreement, Hendler will forfeit his Woodstock home and be under a three-year supervised release and U.S. District Court will order full restitution to Brown in an amount to be determined.

By reaching the plea agreement, 12 other counts of wire fraud, defrauding investors and money laundering against other individuals and businesses will be dropped. All of them were separate from Java Pop Inc.’s business dealings.

Hendler’s mismanagement of Java Pop Inc.’s money began in 2006 when he used $99,000 of a $100,000 line of credit for personal use and never paid back the $99,000 that he borrowed, the indictment said.

Hendler also purchased four vehicles for Java Pop Inc. salesmen, but the board of directors urged him to sell them off because of the company’s precarious financial situation. Hendler sold three of the vehicles to the dealer that he bought them from and the fourth automobile was sold to a relative of Hendler, court records stated.

But according to the indictment, Hendler took the money he sold from the vehicles and deposited it into another personal banking account. None of the funds went back to Java Pop Inc., the indictment said.